By Omar Passons

A friend asked my honest opinion about the San Diego Chargers’ proposal for financing a new football stadium Downtown in East Village near the 12th & Imperial trolley station.

I can’t possibly explain it all in a tweet, so I thought I’d write a bit more. One problem with this conversation is that we don’t usually set the table so that every citizen has the information they need to make a decision. So before I get to the truths, let’s just get a few things out of the way first.

This decision is about a choice among priorities.

Politicians have made an art form of cleverly telling us what the only choices for important public decisions are. If I ask my wife whether we should go out for Italian or Chinese food for dinner, a few things have happened. At first blush, it seems like a harmless question about delicious food to be found in great San Diego neighborhoods like North Park, Little Italy or Convoy. But I asked the question in a way that forces us to spend money going out to eat and takes “eat at home” off the table. It also rules out Thai or sushi or some other type of food.

Takeaway: When politicians or interest groups skip right to “how should we fund the stadium,” they’ve already forced us to assume funding a stadium is the right priority. It cuts out any talk of helping youth get ready for educational success or rethinking how we fix infrastructure or solving the exodus of local police officers.

Sources of money matter

Another favorite trick embraced by public figures is to talk about how the tax used to pay for the stadium shouldn’t be a concern because San Diegans won’t pay for it. A hotel tax (called a transient occupancy tax in San Diego) is an added percentage for the right to stay in the hotel that goes mostly into the city’s general fund — which is the equivalent of a person’s primary checking account. The reality of that hotel tax is that it is paid primarily by out of town visitors (and staycationers like my wife and I). The less obvious part, though, is that a city is a lot like a household in certain ways. Let’s say you have two incomes at home, maybe also a rental property, and a side consulting business. These items make up all the ways your household can increase its income. If you raise the rent on your rental property, it has a couple important effects.

First, the extra money you raise can’t be spent twice. That means once you raise the rent as much as you can, and you put it towards some new Netflix membership, that’s it. No more new revenue to play with. Second, you can’t raise the rent indefinitely. At some point your tenant will just make a different, cheaper decision on where to live.

Applied to the stadium situation, the city of San Diego has only a few good sources to raise money to pay for things. It has sales tax, property tax, fees for things like building a house or collecting trash, and hotel taxes. Even though the hotel tax is being paid by someone else, once the city “raises the rent,” so to speak, there is no using that money for something else. No staffing 911 call centers, no fixing the billions of dollars in maintenance we’ve ignored while taking victory laps on budget “surplus” claims, and no creative centers of reading and coding excellence in libraries to make area youth more competitive even though our city has the world’s most important Bioinformatics hub and a billion dollar software industry. None of these great alternatives are possible once we check the box to spend the money on the Chargers.

Takeaway: If as a city we vote to raise the hotel tax for one purpose, we won’t have other new revenue sources to pay for some other things we care about.

About the Chargers measure

Now that we’ve covered a little background, let’s get into the Chargers’ measure itself [bit.ly/1RrrDh1]. First, you’d be forgiven if you didn’t know exactly where the proposed stadium would go. The boundaries are in Downtown — K Street, 16th, Imperial, 12th — in East Village. All of the tax increase would go to pay for the convention center and stadium. That’s millions of dollars that our leadership could choose to make a case for spending on our multibillion-dollar infrastructure deficit, on properly funding and staffing our Police and Fire Departments, or — gasp — on improving economic growth and opportunity for all San Diegans so that our children in Clairemont, Encanto, Pacific Beach and City Heights all could find a path into our high-growth innovation sectors.

Specific clauses to consider

[Download full text at bit.ly/29rLkaz]

Usually what happens in these proposals is that supporters and opponents will deceive us not with outright lies but by being selective about which truths they share. To some extent, being selective is necessary because the proposal is more than 100 pages long. That said, I’ve chosen sections below that I think are important to consider regardless of what you think about the issue — some are positive, some are negative. But you decide how important they are.

• 30-year agreement — This section requires the Chargers to enter into a 30-year agreement not to relocate the team. I can’t imagine such an agreement not having a loophole, but if we take them at their word this is a reasonable requirement that helps protect the investment.
• Prohibition on cost overrun payments — There is an explicit prohibition on having the city of San Diego pay any cost overruns to construct and operate the stadium. At first blush, this seems great for San Diegans. There are, of course, several likely flaws. One that stands out is the magic modifying language “… except for certain costs resulting from the integrated nature of” the project. This creates the first big loophole because it requires someone to decide what is or is not related to that integrated nature.
• Fine print — mayoral absolute design modification discretion — This section allows “minor modifications” to be made without design review. It also allows the mayor or a designee to have someone define what constitutes a minor modification. Importantly, it also requires the mayor or designee to make this determination — they aren’t allowed to have someone independent do it. Finally, any determination is final with no process for review. A city that has no history of allowing retroactive changes to construction might be entitled to the benefit of the doubt. Given the city’s recent appellate loss [bit.ly/29sYMaC] for doing essentially exactly that for a North Park Jack in the Box that turned a remodel into a tear-down, there’s more than a little reason to be skeptical.
• City barred from paying debt service — The city is not allowed to pay the debt service on any bonds for the stadium out of the general fund. If true, this is actually a really strong aspect of the measure.
• Independent review for conflicts — It’s a complicated provision, but appears to actually be a pretty fair way to set a review panel because it involves all sides getting to nominate their own panelists and the mayor getting to choose all but the tie-breaking panel vote. That fifth person must be selected by the four nominees chosen by the mayor. This all sounds super convoluted, but I read it as a reasonable way to get a fair review panel — provided the City Council acts independently.

With more than 100 pages of text and a hugely complex web of changes to local laws and procedures, it is understandable if the average citizen doesn’t read the whole measure. I’ve tried to capture a few highlights. My bias is that as a native San Diegan I think we should be focusing on making San Diego a great place for all of the families who live here rather than always focusing on some giveaway or another. Hopefully this piece will give regular San Diegans enough information to ask tough questions before casting a vote in November.

—Omar Passons works in economic development and is a past president of the North Park Community Association.